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In just a few days, Canadians will find out whether the economy was officially in recession in the first half of the year.

For many Canadians, it may be a moot point. Nearly six out of 10 already believe the economy is in retreat, polls show.

“While the official marker of a recession is two quarters of negative growth, recessions really start when people believe they do, which seems to have occurred already,” Forum Research president Lorne Bozinoff said after a July poll showed nearly 60 per cent of Canadians were worried.

And, even if the latest data shows five months of negative growth ended in June, thanks to a nice rebound in exports to the U.S., Canada’s economy is still facing a period of sluggish growth.

“Slowth,” as economist Armine Yalnizyan at the Canadian Centre for Policy Alternatives, recently dubbed it in a twitter essay.

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The recession debate has been simmering since late July when Statistics Canada’s said GDP shrank in May for the fifth month in a row.

But it wasn’t until the stock market sank on reports China’s red-hot economy is cooling off that Canada’s economy caught the attention of federal election campaign leaders this week.

June is expected to show a return to growth, when the data is released on Sept. 1 as a lower Canadian dollar finally gave non-energy exports a much–needed boost.

Still, the second quarter is likely to end on a down note, mired in April’s dismal performance. Thus, Canada will have met the “technical” definition of recession – two consecutive quarters of negative growth.

But is it a real recession?

Most economists say the two-quarter definition is too narrow to describe what’s happening.

A real recession needs to be widespread and pervasive and show up in worsening job losses, personal incomes and industrial investment, according to the C. D. Howe Institute’s Business Cycle Council. By those measures, Canada hasn’t met the test, the council says.

“We usually think of recessions as business drops off, you start losing jobs. The government should step in and do something about it,” said council member Stephen Gordon, an economics professor at the Université Laval.

“You can’t call it a Canadian recession. You can call it an Alberta recession,” said Bank of Montreal senior economist Robert Kavcic. “If you look at the labour markets in Ontario and British Columbia, and construction activity and home prices, it’s still very strong. There’s still 75 per cent of the Canadian economy that’s not tied to the energy sector geographically.”

Economists now expect growth in the third quarter as U.S. consumer spending picks up and a lower dollar makes our exports more attractive.

“If there was a recession in Canada, it’s in the rear view mirror,” Kavcic said.

As well, the Conservative Party’s boost to the Universal Child Care Benefit pumped $4 billion into the economy in July as parents received retroactive cheques from the government.

Dubbed “Christmas in July,” the increase over the previous benefit put about $1,000 into the pockets of the average family with two school-aged children last month, in part because the first monthly increase was retroactive to Jan. 1.

Still, growth is expected to be sluggish with many chronic unresolved issues facing the next government. It raises the question what kind of policies does the country need to pull ahead.

“The problem of slow growth isn’t going anywhere,” said David Macdonald, senior economist with the Canadian Centre For Policy Alternatives. “Even if we’re not in a technical recession, we’re not going to see a huge explosion in growth in Canada.”

The Bank of Canada has been sufficiently concerned about the economy to cut its trendsetting interest rate twice so far this year in a bid to boost growth. And economists haven’t ruled out a third rate cut before year end.

But Canadian households, who have been on a spending spree since interest rates dropped to historic lows in 2009, are tapped out.

Business investment has been sitting on the sidelines, awaiting clearly signals the global economy is on track.

That leaves government policies to pick up the slack.

Will the next government choose to invest in infrastructure, social programs and transfers to low income households. Or will it focus on cutting taxes? And how do you balance the budget while still stimulating the economy?

All questions the leaders on the federal campaign trail will be facing between now and the election on Oct. 19.

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